ATLANTIC CITY - City Council adopted a $201.5 million budget Thursday, adding more than three cents to the resort's tax rate and leaving a pending fiscal crisis for next year.

The city's budget includes an $11 million increase in the amount of taxes collected by the city and a city surplus that has been emptied to offset losses in revenue and hefty tax appeals.

Resort officials managed to trim the total budget by nearly $1 million, but it required deferring more than $6 million in payments to the state's pension system. The city will be responsible to pay that off next year, plus incurring an 8.5 percent interest rate.

Council Vice President Dennis Mason joined in the 6-0 vote to pass the budget, but he said he came to the meeting expecting to vote 'no' as a protest against the administration's recent employee hires.

City Council passed a hiring freeze in April, restricting any new government hires without the approval of city legislators. The decision marked one of few sacrifices city officials made this year, while other local governments made unpopular decisions, including county officials implementing employee furloughs.

Despite the freeze, the city administration has continued to fill positions that are made vacant, operating under the assumption that the freeze was only for hiring people to new positions.

"We have a difference in opinion," Business Administrator Michael Scott said Thursday. "We assumed we would be able to re-fill these positions. ... We already talked about this."

The measure, however, restricts all hiring, unless approved by council.

"I could go to (the chief of police) and have him file charges against these people. They're breaking the law," Mason said after the meeting, pointing to the table where members of the administration sit. Asked if he planned to do that, Mason said, "Anything is possible."

Mason, who is running for mayor in November, also implored his council colleagues to hold the administration accountable.

"We passed this (hiring freeze)," he said. "It's up to us to enforce it."

Most council members remained quiet.

Councilman Bruce Ward said the two sides seemed to be engaged in an argument over semantics and suggested amending the freeze ordinance to allow some necessary hires, subject to council's approval. Ward did not realize that the ordinance already says that.

As he walked back to his seat as the argument died down, Councilman Steven Moore said, "We'll just get it straight for next year."

But things are expected to be far from straight next year. The city's decision to defer more than $6 million in pension benefits this year leaves a large hole in the budget that must be filled next year.

City officials opted to put off the payments to have a shot at extraordinary aid, a requirement just to apply. The city learned earlier this month that it received no state aid.

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BY THE NUMBERS

Total Budget:

2008: $202,504,333

2009: $201,513,318.98

Difference: $991,041.02 less

Tax Rate:

2008: 80.4 cents

2009: 83.5 cents

Difference: 3.1 cents more

Tax Levy:

2008: $164,881,845

2009: $175,912,534.98

Difference: $11,030,689.98 more

Surplus:

2008: $9.85 million

2009: $850,000

Difference: $9 million less

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